Cost Optimization

The challenge

• Capex and Opex growth rates, or even as budgets, will most likely continue to decline in the coming years.
• Most common quick-win initiatives have been taken already and do not satisfy the company's mandate.
• Typically, cost-cutting initiatives fail to deliver the promised savings. They also tend to take longer than anticipated.
• Cost-optimization initiatives often have unintended side-effects, potentially even off-setting the savings and leaving the business dissatisfied.

Our advice

Insight

• IT is an integral part of the business value creation chain. Cost-cutting here means that the entire company can be affected. IT must work with the business in partnership to convey the full implications.
• Avoid large scale cost-cutting or making all of the cost cuts at once. Do this in a phased approach so that you can avoid or manage the consequences.
• If a service is delivering the intended value, then cut it completely.

Impact and results 

• Take a value-based approach to cost-cutting.
• Reduce your IT spend in such a way as to continue to deliver on the essential services.
• Always involve the business in cost-cutting exercises.
• Develop a cost-cutting plan that avoids unintended business interruptions.

The roadmap

Besides the small introduction, subscribers and consulting clients within this management domain have access to:

Get started

Our concise executive brief shows you why you should take a value-based cost initiative in your company. We'll show you our methodology and the ways we can help you in completing this.

• Minimize the Damage of IT Cost Cuts – Executive Brief (ppt)
• Minimize the Damage of IT Cost Cuts – Phases 1-3 (ppt)

Understand your mandate

Determine your approach and then take immediate action.

• Minimize the Damage of IT Cost Cuts – Phase 1: Understand the Mandate and Take Immediate Action (ppt)
• Cost-Cutting Plan (ppt)
• Cost-Cutting Planning Tool (xls)

Select initiatives

Identify all initiatives and then build your roadmap.

• Minimize the Damage of IT Cost Cuts – Phase 2: Select Cost-Cutting Initiatives (ppt)

Communicate to the business and get approval for your plan.

When you will execute your plan, adopt change management best practices.

• Minimize the Damage of IT Cost Cuts – Phase 3: Get Approval for Your Cost-Cutting Plan and Adopt Change Management Best Practices (ppt)
• IT Personnel Engagement Plan (doc)
• Stakeholder Communication Planning Tool (xls)